Gold retreats on fears of oil-related inflation

Spot gold prices fell 0.5% to $4,327.80 per ounce, driven by inflation fears stemming from rising oil prices, which strengthened expectations that the Federal Reserve will raise interest rates at its meeting this week.

Spot gold prices fell 0.5% to $4,327.80 per ounce on Monday, after declining for the third consecutive week. The decline comes amid rising oil prices that exacerbated inflation concerns, boosting expectations that the Federal Reserve may raise interest rates at its monetary policy meeting on September 15-16. According to the CME FedWatch Tool, traders are pricing in an approximately 86% chance of a rate hike, up from 67% before last week's inflation data. Data released on Friday showed an acceleration in US consumer prices in August. Oil prices jumped more than 2% on Monday following Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf, raising supply concerns. Goldman Sachs said it still sees upside risks to its forecast that gold will reach $4,900 per ounce by the end of 2026. Silver fell 1.1% to $63.75, platinum 0.8% to $1,782.50, and palladium 0.7% to $1,290.36.